TMI Blog2018 (7) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... ences, in the form of cash book, bank book, bank statement etc, showing the source of this cash in hands of the persons giving the cash were produced or submitted. The appellant has submitted Xerox copies of cash receipts but these receipts contained only the signature of the appellant and not of the buyers / persons said to have given cash. Furthermore, these receipts also do not contain the dates on which this cash was received. The appellant has filed a copy of the FIR filed by the buyers / person said to have given cash which states that the buyers have given a sum of ₹ 3, 51, 00, 000/- by cheque and cash. In this FIR, the amount of cash given or the date on which this cash was given, has not been mentioned. It is also not clear from the FIR whether the cash given is substantial or is merely a token amount. The above discussion would show that the appellant has not been able to substantiate his explanation. - Decided against assessee - ITA No. 621/JP/2015 - - - Dated:- 20-7-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri H. M. Singhvi (CA) For The Revenue : Smt. Seema Meena (JCIT-DR) ORDER PER: BHAGCHAND, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 30-03-2007 718737 Indusind Bank Ltd. 12, 50, 000. 00 30-03-2007 718738 Indusind Bank Ltd. 12, 50, 000. 00 30-03-2007 718739 Indusind Bank Ltd. 12, 50, 000. 00 02-04-2007 718740 Indusind Bank Ltd. 12, 50, 000. 00 02-04-2007 718741 Indusind Bank Ltd. 12, 50, 000. 00 03-04-2007 718742 Indusind Bank Ltd. 12, 50, 000. 00 03-04-2007 718743 Indusind Bank Ltd. 12, 50, 000. 00 04-04-2007 718744 Indusind Bank Ltd. 12, 50, 000. 00 04-04-2007 718745 Indusind Bank Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, 00, 000. 00 06-11-2007 687629 Indusind Bank Ltd. 10, 00, 000. 00 06-11-2007 687630 Indusind Bank Ltd. 10, 00, 000. 00 Vijay Bansal 06-11-2007 905208 Indusind Bank Ltd. 9, 00, 000. 00 02-04-2007 624457 Indusind Bank Ltd. 9, 00, 000. 00 03-04-2007 624458 Indusind Bank Ltd. 9, 00, 000. 00 03-04-2007 624459 Indusind Bank Ltd. 9, 00, 000. 00 04-04-2007 624460 Indusind Bank Ltd. 9, 00, 000. 00 04-04-2007 905201 Indusind Bank Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, 000. 00 Dishonored 687630 10, 00, 000. 00 Dishonored Vijay Bansal 624456 09, 00, 000. 00 Dishonored 624457 09, 00, 000. 00 Honored 624458 09, 00, 000. 00 Dishonored, Cash Rec. 624459 09, 00, 000. 00 Honored 624460 09, 00, 000. 00 Honored 905201 09, 00, 000. 00 Dishonored, Cash Rec. 905202 11, 00, 000. 00 Honored The dishonored cheques were received back from the bank with the memorandum explaining the reason (referring to the drawers), copies of these bank intimation for dishonored cheques are enclosed (See P. B. Pg. No. 30-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account . In this respect we are enclosing here with the cash account(See P. B. Pg. No. 10) for your kind perusal . From the statement your honor will note that upto 10-05-2007 the assessee Has withdrawn ₹ 2030000/- and out of that deposited back RS 1500000/- on 16-05-2007 17-05-2007 and thereafter a deposit on 21-08-2007 22-08-2007 was out of the cash balance available on 17- 05-2007 and further withdrawal from the bank account household withdrawal were generally from Rajdhani Gas Service . The assessee further had recovered from the buyer which was also available with assessee. Thus the deposit in the bank account were fully explained but the Assessing officer added a sum of ₹ 2834000/- for which no detail were given in the Assessment order. Thus the Assessing Officer overlooked the basic facts of heavy withdrawal and deposit back in the bank account. Though the assessee has lost first quantum Appeal before CIT (Appeal) and filed Appeal before ITAT against CIT (Appeal) order, the same as pending before ITAT. The Assessing Officer issued penalty notice u/s 271 (1) (c). Though no reply was given before the Assessing officer in penalty proceeding. But you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the income escaped assessment and the income was concealed. The fact that cash deposit was a cash receipt against an agreement for sale of the shares of the company owned by the assessee. Even if it was not considered than it was am receipt against sale of an asset and was a declared receipt nothing was undisclosed. It was not an unexplained cash credit which the AO deliberately misunderstood. Even if it is assumed that the penalty proceedings were initiated as stated in the penalty order dated. :- 20/12/2010, the impugned order is illegal and bad in law since satisfaction for initiating penalty was not recorded in the assessment order except in the case of disallowance of cash deposit. The CIT(A) mentioned in his order that the agreement for sale was produced and the cash deposit was fully explained still the ld. CIT(A) did not accept it proceeded in stereo type mode. Therefore, on this ground alone the impugned order is liable to be set aside. Penalty u/s 271(1) (c) was not imposed by the department in its own case . :- 1. The appellant submit that the ld. CIT(A) ought to have followed its earlier stand in the appellant own case under identical circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation that was necessary in the present case, was a notification by the Board in exercise of powers under Section 132(1) of the said Act . There is no such notification authorizing any Joint Director or Joint Commissioner . The notification dated 23 . 10 . 1998 on which the revenue seeks to place reliance is one which has been issued not by the Board, but by the Central Government and that too in exercise of powers under Section 117 (1) of the Act . There is no specific empowerment in favour of any Joint Director or Joint Commissioner under Section 132(1) of the said Act . Mere re-designation of a class of officers does not translate to the specific empowerment which is required under Section 132(1) of the said Act . The definition of Additional Director has been inserted with retrospective effect from 01 . 06 . 1994 by virtue of the Finance Act, 2007, the definition of Joint Director was introduced as Section 2 (28D) for the first time in the said Act by virtue of the Finance No . ( 2) Act of 1998 w . e . f . 01 . 10 . 1998 . Thus, there was no concept of a Joint Director prior to 01 . 10 . 1998 . Thus, there was no concep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tya Mills Ltd. v. IAC (44 TTJ 363, 375) has held as under. :- Certain circumstances or factors may have created suspicion but due to fact that full enquiry or investigation was not made or not possible to be made and sustained . But this cannot and would not suffice for the purpose of imposition of penalty . It is trite proposition that if both the possibilities are there then in the situation of lack of evidence it could not be justified so choose the once which leads to the inference of concealment . Taking into account the entirely of the facts and circumstances of the case, no case of penalty u/s 271 (1) (c) was made out . ITAT, Mumbai Bench has held in the case of Shri Ishar Alloy and Steel Ltd. v. Asst. CIT (1999) 68 ITD 117, 124 (Mum. ). :-(See. P. B. of judgements Pg. No. 23-29) The AO could not establish that the evidence adduced by the assessee was false or the claim of the assessee was not bona fide . While this lack of sufficient evidence may lead to disallowance of assessee s claim, in the absence of a positive finding regarding the falsity or impossibility of assessee s claim having been established by the AO, even on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (c) is bad in law as per the provision contained in section 274. The Hon ble ITAT Jaipur Bench in the case of Sh. Gyan Chand Jain in ITA 53/JP/2011 for A. Y. 1998-99 following the Supreme Court decision and Delhi High Court decision in the case of Pawan Kumar Garg. A copy of ITAT order is being enclosed for your kind perusal (See. P. B. Pg. No. 1-12). Even in the facts the assessee has given full explanation about the fact regarding the deposit in the bank which is not found to be false and because human probability there will be no penalty imposed u/s 271(1) (c). Therefore the penalty imposed by AO and confirmed by CIT(A) may be deleted. 4. On the other hand, the ld. DR has relied on the orders of the authorities below. 5. We have heard the rival contentions of both the parties, perused the material available on the record and also gone through the various case laws relied upon by both the sides. We have also gone through the relevant provisions of law in the Income Tax Act. The pleadings of the ld AR was that the permission sought by the Assessing Officer was from Addl. Commissioner which was not as per law as the permission sought must have been from the Joint Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not contain the dates on which this cash was received . The appellant has filed a copy of the FIR filed by the buyers / person said to have given cash which states that the buyers have given a sum of Rs . 3, 51, 00, 000/- by cheque and cash . In this FIR, the amount of cash given or the date on which this cash was given, has not been mentioned . It is also not clear from the FIR whether the cash given is substantial or is merely a token amount . The above discussion would show that the appellant has not been able to substantiate his explanation . ( b) The appellant has stated that the company - M/s . Tiger Continental Wild Life Resorts Ltd . has authorized the appellant to carry out the sale transaction on its behalf . However, the company has not authorized the appellant to receive the sale consideration . Furthermore, the appellant has stated that it has received cash of Rs . 48 lacs from the buyers whereas the amount deposited in the bank account is only Rs . 28, 34, 000/- . The appellant has not stated the application of the balance amount which is substantial . The above discussion, shows that the explanation furnished by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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